Digital disruption

Over the past year, the Deloitte network has been developing a perspective on the elements of success that will be needed by financial institutions in 2020. Two thousand executives both from financial institutions and from within Deloitte have been interviewed, polled and invited to working sessions regarding the impact of disruptive effects that dramatic technology change, shifts in customer expectations and the regulatory response to the financial crisis have had on the financial services industry.

It is clear from all these interactions that the industry faces an unprecedented series of threats:

• New, agile and hitherto largely unregulated players are emerging and are disintermediating the traditional incumbents
• Regulation is making it harder to innovate and grow
• Legacy strategy, infrastructure and thinking are preventing the existing players from responding aggressively to these threats.

This paper explores some of the considerations financial institutions should be taken into account to successfully position and compete with the new breed for hyper-competitive players. In doing so, it covers innovation and its intrinsic correlation with agility as well as explores recent developments in growth markets. It concludes with a few thoughts on the ingredients required for a stable financial environment, focusing more specifically on the role of regulators and the constant struggle to achieve the ideal balance between innovation and regulation.

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